American Tax Payer Relief Act of 2012
Most programs enacted by the Food, Conservation, and Energy Act of 2008 expired in 2012 or were set to expire with 2012 crops. The American Taxpayer Relief Act of 2012 (ATRA) extends authority under the Food, Conservation, and Energy Act of 2008 (the 2008 farm bill) for one year --to 2013--for selected programs administered by the Farm Service Agency (FSA). In general, the program provisions for 2013 remain the same as for 2012, with some exceptions noted below. Without ATRA, legislative authority for 2013 would have automatically reverted to the "permanent law" provisions of the Agricultural Adjustment Act of 1938 and the Agriculture Act of 1949, which provide for very high support levels.
2013 DCP/ACRE Signup: FSA will begin sign-up for DCP and ACRE for the 2013 crops on Feb. 19, 2013. The DCP sign-up period will end on Aug. 2, 2013; the ACRE sign-up period will end on June 3, 2013.
2013 MILC Signup: Producers' MILC contracts are automatically extended to September 30, 2013, so there is no need for producers to re-enroll in MILC. From Feb. 1-28, 2013, MILC participants are able to change their start month selections because producers were not able to make timely start month selections for FY 2013 according to normal start month selection provisions. The production start month selected may be any month in FY 2013.
FSA Programs Extended to 2013
Direct and Counter-Cyclical and Average Crop Revenue Election 2013:
The 2013 DCP program provisions are unchanged from 2012. Both direct and counter-cyclical payments are calculated using historical base acres and payment yields established for the farm. Signup begins Feb. 19, 2013 and ends on Aug. 2, 2013. Direct payments will be issued October 2013; there is no authority for advanced direct payments. Counter-cyclical payments for 2013 crops will be issued beginning October 2014 if average prices fall below target levels.
The 2013 ACRE program provisions are unchanged from 2012. ACRE is an alternative program to DCP. Eligible participants in 2013 may choose to enroll in either DCP or ACRE for the 2013 crop year. This means that eligible producers who were enrolled in ACRE in 2012 may elect to enroll in DCP in 2013 or may re-enroll in ACRE in 2013 (and vice versa). ACRE signup begins Feb. 19, 2013, and ends on June 3, 2013. Producers who elect to enroll a farm in ACRE agree to: (1) forgo counter-cyclical payments, (2) a 20-percent reduction in their direct payments, and (3) a 30-percent reduction in the marketing assistance loan rates for all commodities produced on the farm that are eligible for ACRE payments. ACRE payments are tied to current plantings on the farm as opposed to direct and counter-cyclical payments, which are tied to the farm’s base acres.
Marketing Assistance Loans
The 2013 marketing assistance loan program provisions are unchanged from 2012. Marketing assistance loans for major commodities allow producers to receive 9-month loans from the government. Marketing assistance loans provide an influx of cash when market prices are typically at harvest-time lows, thereby allowing producers to delay the sale of the commodity until more favorable market conditions emerge. Loan deficiency payments are also issued when commodity prices fall below loan rates.
Adjusted Gross Income and Actively Engaged Requirements
The American Taxpayer Relief Act of 2012 also extended the adjusted gross income requirements for 2013, which are unchanged from 2012 requirements. Before producers can receive payments for the above programs, they must file the proper forms to verify that their incomes are below specified levels.
Milk Income Loss Program
The MILC program was extended through September 30, 2013 with modifications. MILC compensates enrolled dairy producers when the Boston Class I milk price falls below $16.94 per hundredweight (cwt) as adjusted by the dairy feed ration adjustment as in the 2008 farm bill.
Fiscal year 2012: September 2012 was the last month eligible for MILC payments under the 2008 farm bill. ATRA increased the MILC payment formula for September 2012 and results in a payment rate of $0.59 per hundredweight (the rate for September 2012 was zero using the formula in the 2008 farm bill).
Fiscal year 2013: Producers' MILC contracts are automatically extended to September 30, 2013, so there is no need for producers to re-enroll in MILC. Also, producers are eligible for a $0.02 per hundredweight payment for October 2012.
From Feb. 1-28, 2013, MILC participants are able to change their start month selections because producers were not able to make timely start month selections for FY 2013 according to normal start month selection provisions. The production start month selected may be any month in FY 2013.
FSA administers a variety of programs under the Conservation Reserve Program (CRP), which allows producers to enter into long-term contracts to receive annual rental payments for planting permanent vegetation on eligible farmland (including highly erodible, marginal pasture, and conservation priority areas). In addition to periodic general signups, producers may enroll their most environmentally sensitive land, if it meets eligibility requirements, under CRP's continuous signup. Producers may also enter into long-term contracts under the Conservation Reserve Enhancement Program (CREP), which are state and federal partnerships that provide payments for installing specific conservation practices. Authority to enroll new acres in these programs ended on September 30, 2012. ATRA authorizes the continuation of existing FSA conservation programs through fiscal year 2013. The dates producers may begin entering in contracts will be announced in spring 2013 via news release.